Respected financial columnist Scott Burns, in a Dallas Morning News article today, reports a unique proposition to solve our country’s housing crisis by opening the borders to immigrants who can afford to buy homes in the United States, and then granting citizenship to those immigrants. While this is an economic solution and not an immigration solution, I thought the article was worth mentioning. Here are excerpts from the column:

Our friends in Washington continue to reward witless members of the financial sector. Meanwhile, those of us who don’t fly Bonus Class are thinking about importing guillotines from France.

Thankfully, we may not need to place the order.

All we have to do is to get Washington to listen to the best idea I’ve heard to end the decline of housing prices and restore our confidence in the most important asset most Americans ever own. The idea comes from economist A. Gary Shilling and real estate developer Richard S. Lefrak.

Their suggestion: Don’t think about artificially low mortgage interest rates and other stopgaps. Instead, eliminate the oversupply of houses. And, by the way, don’t spend a dime of taxpayer money doing it.

How can this be done? Simple: Open our borders to immigrants who can buy a home in the U.S. Let a million immigrants a year do this for two years, and the entire oversupply of homes and condos will be absorbed. Supply will no longer dwarf demand. Prices will stabilize. The most important asset owned by the vast majority of Americans will, once again, be a source of pride and security.

There has been much attention paid to the incredible decline of equity markets around the world, but the vast majority of Americans have far more at risk in the housing market than in any financial asset (bank accounts, stocks, bonds, mutual funds, etc). Indeed, many Americans have more at risk in the used-car market than in the stock market.

The middle-income

Households in the middle of the income distribution owned a primary home worth a median of $150,000 but had median financial assets of only $18,600. Middle-income Americans, in other words, have about eight times as much to lose in the home resale market as in all of the financial markets.

Shilling estimates that we built 6.7 million excess houses during the boom from 1996 to 2005. Of that number, 3.9 million were built to make up for underbuilding during the 1987-1991 S&L collapse. That leaves an excess of 2.8 million homes – about two years of building. He estimates that less building in 2007 and 2008 reduced the surplus to about 2.4 million houses.

Influx of buyers

Reducing interest rates or resetting mortgage payments won’t reduce that surplus. The only way it will disappear is if new customers appear and buy those homes. The fastest way to do this is to offer citizenship to immigrants as a reward for buying a home in America.

Here’s the formula: Buy a home. Save America. Become a citizen. It’s a suggestion that’s admirably direct compared to the expensive, complex programs that Congress has already funded.

Shilling writes: “If the current excess of 2.4 million houses were purchased at today’s median home price of about $184,000, the inflow from foreigners would be $88 billion, assuming they put 20 percent down and borrowed the rest in this country.

“If they paid cash, the inflow would be $442 billion. Besides stimulating the domestic economy, this would vastly help the U.S. foreign accounts and support the dollar. The mere announcement of this program would probably go a long way toward stabilizing house prices.”

And stabilizing house prices is very important. It may be the whole ballgame. Without productive action, Shilling estimates home prices will fall an additional 20 percent by the end of 2010. That would leave nearly 25 million homeowners upside down, or owing more on their homes than they are worth.

This is something worth writing about to your representative or senator.